New rules on employer liability in groups will enter into force on January 1, 2024. The rules entail special obligations for employers in groups in connection with reorganizations and downsizing. The changes are practically important for any company that is part of a group.
These are the main points:
- The obligation to offer other suitable work in the event of termination due to downsizing will no longer be limited to the employer company itself but include all Norwegian group companies.
- The preferential right to new employment after downsizing will no longer be limited to the employer company itself but include all Norwegian group companies.
- For groups with at least 50 employees, there will be an obligation to establish a framework for cooperation, information and discussion between the group companies and the employees in the group. The obligation to inform and discuss applies to expansions, reductions or reorganizations that may have a major impact on employment in several of the companies.
The new rules require employers to keep track of labor needs at group level in a different way than before and ensure information flow and coordination between different group units. Employers in groups should therefore spend the coming weeks establishing practical arrangements and good routines for coordinating and managing the extended employer responsibility.
Note that the group definition in the new rules is broader than under the Limited Liability Companies Act, so every company must clarify as soon as possible whether they are covered by the new rules. The new rules also entail changed requirements for the content of termination notices given in downsizing, so templates for this must be updated!
The new rules mean that it will be very important for employers in groups to inform themselves about the possibilities of entering into agreements with employee representatives as a basis for more flexible and manageable processes.
We at Littler have extensive experience in assisting in this type of process and are ready to advise our clients on how to comply with the new rules.
